By Yemi Olakitan
Resource-rich nations are grouped by the International Monetary Fund (IMF) based on the composition of their export markets. At least 20 African nations, including Nigeria, Angola, Ghana, and Tanzania, are categorised as resource-rich, with the majority of their exports consisting of raw minerals, agricultural products and crude oil.
The diversity of their export markets and value-added goods is the basis for classifying nations on other continents like Japan, Malaysia, and Indonesia.
Crude oil has accounted for more than 90% of Nigeria’s export profits since 1973, the year of the first oil boom, making Nigeria a textbook example of a monocultural economy on a global scale. A monocultural economy may benefit from product specialisation, but it goes against the spirit of Section 16 of the 1999 Constitution (as amended), which calls for a balanced and robust economy.
The state is required by Section 16 of the Constitution to “harness the resources of the nation and promote national prosperity and an efficient, dynamic and self-reliant economy… and direct its policy towards ensuring the promotion of a planned and balanced economic development” within the framework of the ideals and goals of the 1999 Constitution (as amended).
The 36 state governors, the governor of the Central Bank, and other co-opted government officials make up the National Economic Council, which was established by Section 153 (1) and Paragraphs 18 and 19 of Part I of the Third Schedule with the purpose of achieving this state economic objective. The National Economic Council is chaired by the vice president and has the duty to “advise the President concerning the economic affairs of the Federation, and in particular on measures necessary for coordination.”
The next president must provide coordinated and collaborative leadership in accordance with the constitution’s mandate that Nigeria’s three tiers of government identify, harness, and coordinate economic policies that take advantage of their comparative economic advantages, in order to produce at least one quality product. This is true even though the president sits at the top of the leadership hierarchy with enormous and broad responsibility to influence national economic policies and outlook.
The President must be deliberate in pursuing devolution of power to ensure that subnational governments have the necessary energy baseload for industrialization: the ability to generate and transmit electricity to industries within their states; revive our steel sector; invest heavily in the manufacturing sector; and move Nigeria’s economy away from oil, subsistence farming, and informal activities as its primary drivers.
Beyond that, the issue of whether or not a future without of oil is even conceivable comes up. Such a possibility is suggested by the shifting nature of the global economy, though it is not as straightforward as it first appears given that oil serves a variety of purposes, from fuel to petrochemical products that serve as the raw materials for items like tech gadgets, plastics, cables, creams, and other goods.
Nigeria needs a strong president who recognises that with its 206 trillion cubic feet of proven natural gas reserves, the nation needs climate justice and a just energy transition that permits gas as our transition fuel, in our process of contributing to the global climate solution. The global green revolution is predicated on the idea that economic growth no longer requires higher carbon emissions.
A diverse economy that shifts away from dirtier fuels like diesel, kerosene, and gasoline is preferable for Nigeria given the shifting geopolitical scenario. Oil prices fell to an all-time low, trading at minus $37.63, at the height of the COVID-19 global pandemic in 2020, leaving Nigeria with unwanted cargoes of crude oil and liquefied natural gas (LNG). Despite the fact that Nigeria’s Bonny Light crude was trading at $12 at the time, our biggest buyers were unable to purchase due to the corona virus’ effects. Most diversified economies recovered from the effects of COVID-19 more quickly than monocultural economies that relied primarily on oil when countries opened up their cities.
Nigeria must now move past political platitudes to innovatively explore its comparative economic advantages, leveraging its over 45 mineral resources like lithium, which, in the next ten years, will make up 94% of the tech batteries made worldwide and is currently valued at $78,000 per tonne; a leather industry that, if properly utilised, has the potential to generate over $1 billion in export revenues by 2025; and a rice industry that can feed Nigeria and many other developing nations.
The ultimate goal of a Nigeria without oil is an economy with stable wealth distribution and redistribution, managed in a way that prevents the concentration of wealth or the means of production and exchange in the hands of a few people or a group, and which ensures that Nigeria’s material resources are harnessed and distributed as effectively as possible to serve the common good; it locates industrial clusters throughout the nation that define the productivity identity of each region.
We require the President’s leadership to assume accountability, run Nigeria as if there were no oil, fully implement the PIA and our local content laws, put an end to oil theft to increase our revenue base, prudently reinvest oil proceeds in other productive economic sectors, and definitively eradicate corruption from the economic environment.
